**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

**FORM 10-K**

 
| **ý** | ** ** | **Annual  report pursuant to section 13 or 15(d)of the Securities Exchange Act of  1934**                                                                                                                                                                  |
|------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |       |                                                                                                                                                                                                                                                            |
|       |       | **for the fiscal year ended June 30, 2005**                                                                                                                                                                                                                |
|       |       | ** **                                                                                                                                                                                                                                                      |
| **OR**     |
|       |       |                                                                                                                                                                                                                                                            |
| **o**      | ** ** | **Transition  report pursuant to section 13 or 15(d) of the Securities Exchange  Act of 1934**                                                                                                                                                        |
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                      |
| ** ** | ** ** | **for the transition period  from                    to                  ** |

 

**Commission File Number 1-7256**

 

**INTERNATIONALALUMINUM CORPORATION**

(Exact name of Registrant as specified in its charter)

 

| **California**                                        | ** ** | **95-2385235**        |
|-------------------------------------------------------|------------|-----------------------|
| (Incorporation)                                       |       | (I.R.S. Employer No.) |
|                                                  |       |                  |
| **767 Monterey Pass Road  Monterey Park, California** | ** ** | **91754**             |
| (Address of principal executive office)               | ** ** | (Zip Code)            |

 

Registrant’s telephone number, including area code   **(323) 264-1670**

 

Securities registered pursuant to Section 12(b) ofthe Act:

 

| **Title  of Each Class**       | ** ** | **Names  of Exchanges on Which Registered** |
|--------------------------------|------------|---------------------------------------------|
| ** **                     | ** ** | ** **                                  |
| Common Stock ($1.00 Par Value) |       | New York Stock Exchange                     |

 

Securities registered pursuant to Section 12(g) ofthe Act:  **None**

 

Indicateby check mark whether the Registrant (1) has filed all reports required tobe filed by Section 13 of the Securities Exchange Act of 1934 during thepreceding 12 months and (2) has been subject to such filing requirementsfor the past 90 days. Yes ý No o

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the bestof Registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K.  ý

 

Indicateby check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2of the Act).  Yes ý  No o

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).  o Yes  ý No

 

Theaggregate market value of the registrant’s common stock held by non-affiliatesof the registrant on December 31, 2004, the last business day of theregistrant’s most recently completed second fiscal quarter, was $78,116,187(based on the closing sales price of the registrant’s common stock on thatdate).  As of September 2, 2005, 4,279,281shares of the registrant’s common stock were issued and outstanding.

 

**DOCUMENTS INCORPORATED BY REFERENCE**

 

Registrant’sAnnual Report to Shareholders for fiscal year ended June 30, 2005 isincorporated by reference into Parts I and II.

 

Portionsof the Registrant’s definitive Proxy Statement for the 2005 Annual Meeting ofShareholders are incorporated by reference into Part III.

 

 

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PART I

 

ITEM 1.                             BUSINESS

 

a.                                       GENERAL DEVELOPMENT OF BUSINESS

 

InternationalAluminum Corporation is an integrated building products manufacturer ofdiversified lines of quality aluminum and vinyl products.  The Company was incorporated in California in1963 as successor to an aluminum fabricating business begun in 1957 andmaintains its executive offices at 767 Monterey Pass Road, Monterey Park,California 91754.  The Company’stelephone number is (323) 264-1670. Reference to the “Registrant”, “International Aluminum Corporation” orthe “Company” includes International Aluminum Corporation and its subsidiariesunless the context indicates otherwise.

 

b.                                      INDUSTRY SEGMENTS, LINES OF BUSINESS ANDCLASSES OF PRODUCTS

 

Thisinformation is included on pages 4 and 24 of the Registrant’s 2005 AnnualReport to Shareholders and is hereby incorporated by reference.

 

c.                                       NARRATIVE DESCRIPTION OF BUSINESS

 

Processesand Products

 

Residential

 

Residentialproducts are fabricated from aluminum and vinyl into a broad line of horizontalsliding windows, vertical sliding windows, casement windows, garden windows,bay and bow windows, special configuration windows, louvre windows, patiodoors, wardrobe mirror doors and related products.  These products are used in new residentialconstruction and in remodeling, home improvement and replacement.

 

Commercial

 

Commercialproducts are fabricated from aluminum into curtainwalls, window walls, slopeglazed systems, storefront framing, entrance doors and frames and commercialoperable windows for exterior applications, including storm and blast resistantapplications and officefronts, office partitions, doors and frames for interiorapplications.  These products areutilized in varying combinations to produce systems used for office andcommercial construction, remodeling and tenant improvement applications.

 

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AluminumExtrusion

 

Inthe extrusion process, heated aluminum billets are hydraulically forced throughsteel dies to produce a piece of metal of the desired cross-sectional shape andlength.  The extrusions are then cut and,when requested, anodized or painted in a variety of finishes in the Company’sanodizing and painting departments.

 

Aluminumextrusions produced by the Company are used in fabricating substantially all ofits other aluminum products. During fiscal 2005, approximately 49% ofextrusions produced were sold to non-affiliated customers with the balanceutilized by International Aluminum Corporation subsidiaries.  The Company furnishes design services toassist its customers in developing or better utilizing custom extrusions.

 

Salesand Distribution

 

TheCompany markets its residential products primarily to lumber yards, homeimprovement centers, independent dealers and distributors, with whom theCompany has no long-term contracts. Commercial building products are marketed primarily to glazing andtenant improvement contractors.  Aluminumextrusions are marketed principally by direct sales to other manufacturers.

 

Eachof the Company’s subsidiaries has its own administrative and salesorganizations.  Sales are made primarilyin North America.

 

Nocustomer accounted for more than 5% of net sales in 2005, and no material partof the business is dependent upon a single customer or a few customers, theloss of any one or more of whom would have a materially adverse effect on thebusiness of the Company.  The Companydoes business on a current basis and has no significant backlog of unfilledfirm orders.

 

Seasonality

 

Salesof products designed for residential and commercial applications are subject tocyclical swings in new construction and seasonal fluctuations due to reducedconstruction activity in some marketing areas during the winter months (secondand third quarters).

 

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Materials

 

TheCompany purchases its aluminum requirements from primary aluminum producers,under supply agreements at market prices, or spot metal brokers.  Although increased worldwide demand producesperiods of tight supply of aluminum, the Company has had satisfactoryexperience to date in obtaining sufficient raw materials to meet itsrequirements and does not anticipate material shortages that wouldsignificantly hamper its operations.

 

Flatglass is purchased from domestic glass manufacturers. The Company has hadsatisfactory experience to date in obtaining sufficient glass to meet itsrequirements.

 

TheCompany produces the aluminum extrusions used in the products it manufacturesand sells.  Vinyl, hardware and smallparts are purchased from outside sources.

 

WorkingCapital

 

Tomaintain an adequate supply of aluminum to meet customer delivery requirementsand to assure itself of a continuous allotment of materials from its suppliers,the Company may at times carry a significant inventory of aluminum.  Depending on price and availability, bulkquantities may be purchased from either primary aluminum producers or from spotmetal brokers.

 

TheCompany does not believe there are any abnormal working capital requirementsassociated with any of its product groups as merchandise is normally producedfor specific customer orders or shipped from inventory and as a generalpractice extended payment terms are not granted to customers.

 

Employees

 

Asof June 30, 2005, the Company had approximately 1,500 full-time employees,approximately 800 of whom were covered by various collective bargainingagreements.  Management believes that theCompany’s employee relations are good. Two agreements are due to expire in the upcoming year and management believesthat the prospects are reasonably good for renewal.

 

Patents

 

TheCompany has no material patents, either issued or pending, and is not a partyto any significant licensing agreements.

 

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Competition

 

TheCompany’s business is highly competitive. Competition in all product lines ison the basis of price, service and product quality.  The manner and extent of such competitiondepends on the product being marketed and the relevant marketing area.  The Company faces competition primarily fromnumerous fabricators. Several of the Company’s major competitors in sellingcommercial products and aluminum extrusions are substantially larger, morediversified and have greater resources than the Company.

 

Expansionof its product lines could result in the Company competing with certain of itspresent customers.  While the Companycannot accurately predict the effect, if any, that such development would have onits business, the Company anticipates no material adverse effect.

 

Ourperformance is dependent to a significant extent upon levels of newconstruction, repair and remodeling for residential and commercialconstruction, all of which are affected by such factors as interest rates,consumer confidence and economic outlook. In the near term, we expect to operate in an environment of relativelystable levels of construction and remodeling activity.  However, increases in interest rates couldhave a negative impact on the level of housing construction and remodelingactivity.  The Company cannot predictwhether, or when, such rates might increase, but the company’s experience hasshown that high interest rates for construction financing, mortgages andimprovement loans may adversely affect the Company’s revenues.

 

GovernmentRegulation

 

The Company’s aluminum extrusion,anodizing, painting and manufacturing facilities are subject to water and airpollution control standards mandated by federal, state and local law.  While the Company anticipates no materialcapital expenditures to meet established environmental quality controlstandards, there can be no assurance that more stringent standards will not beestablished which might require such expenditures.

 

TheCompany is subject to various federal and state labor laws which govern itsrelationship with employees, including with regard to minimum wagerequirements, overtime pay and other working conditions.  Significant new government-imposed increasesin minimum wage rates, paid leave of absence or mandated health benefits couldhave an adverse effect on our results of operations.

 

4

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d.                                      FINANCIAL INFORMATION ABOUT FOREIGN ANDDOMESTIC OPERATIONS

 

Theinformation concerning income before taxes of foreign and domestic operationsfor fiscal years 2005, 2004 and 2003 is set forth in Note 9 to the consolidatedfinancial statements included on page 23 of the Company’s 2005 AnnualReport incorporated herein by reference. There is no other significant related information regarding foreignoperations.

 

e.                                       AVAILABLE INFORMATION

 

TheCompany maintains a website at www.intalum.com. The Company makes available on its website, free of charge, its periodicreports filed with the Securities and Exchange Commission (www.sec.gov) pursuantto Section 13 of 15(d) of the Securities Exchange Act of 1934, andall amendments, as soon as is reasonably practicable after filing.

 

TheCompany posts on its website its Code of Business Conduct and Ethics for allemployees as well as its separate Code of Ethics for Senior Executive Officersand Senior Financial Officers.  TheCompany will furnish, without charge, a copy of its Code of Business Conductand Ethics and Code of Ethics for Senior Executive Officers and SeniorFinancial Officers to any person upon request. Such request should be made to the Company at 767 Monterey Pass Road,Monterey Park, California 91754, Attention: Corporate Secretary.

 

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ITEM 2.                             PROPERTIES

 

Thefollowing table sets forth information concerning the location, size and use ofthe Company’s present facilities:

 
| **Location**             | ** ** | **Square  Feet (A)** | ** ** | **Use**                                            | ** ** |
|--------------------------|------------|----------------------|------------|----------------------------------------------------|------------|
|                     |       |                 |       |                                               |       |
| Alhambra,  CA            |       | 185,000              |       | Aluminum  extrusions, foundry & finishing |       |
| Waxahachie,  TX          |       | 269,000              |       | Aluminum  extrusions & finishing          |       |
| South  Gate, CA          |       | 189,000              |       | Residential  products                              |       |
| Hayward,  CA             |       | 103,000              |       | Residential  products                              |       |
| Phoenix,  AZ             |       | 100,000              |       | Residential  products                              |       |
| Vernon,  CA              |       | 134,000              |       | Commercial  products                               |       |
| Bedford  Park, IL        |       | 81,000               |       | Commercial  products                               |       |
| Boston,  MA              |       | 21,000               | (L)        | Commercial  products                               |       |
| Detroit,  MI             |       | 12,000               | (L)        | Commercial  products                               |       |
| Waxahachie,  TX          |       | 159,000              |       | Commercial  products                               |       |
| Denver,  CO              |       | 16,000               | (L)        | Commercial  products                               |       |
| St.  Louis, MO           |       | 14,000               | (L)        | Commercial  products                               |       |
| Dallas,  TX              |       | 36,000               | (L)        | Commercial  products                               |       |
| Houston,  TX             |       | 19,000               | (L)        | Commercial  products                               |       |
| Rock  Hill, SC           |       | 74,000               |       | Commercial  products                               |       |
| Atlanta,  GA             |       | 37,000               | (L)        | Commercial  products                               |       |
| Baltimore,  MD           |       | 20,000               | (L)        | Commercial  products                               |       |
| Langley,  B.C., Canada   |       | 63,000               |       | Commercial  products                               |       |
| Guelph,  Ontario, Canada |       | 72,000               |       | Commercial  products                               |       |
| Houston,  TX             |       | 57,000               |       | Commercial  products                               |       |
| Waxahachie,  TX          |       | 60,000               |       | Commercial  products                               |       |
| Dallas,  TX              |       | 14,000               | (L)        | Commercial  products                               |       |
| Monterey  Park, CA       |       | 19,000               | (L)        | Executive  offices                                 |       |

 

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(A)                              Includes manufacturing, warehouse and officespace; excludes construction in process, parking and yard storage space.

 

(L)                                 Indicates leased premises.

 

Ofthe 1,754,000 square feet exhibited above, 1,546,000 square feet are owned bythe Company.  The balance of 208,000square feet is leased under agreements expiring at various dates.  The Company believes that its facilities areadequate for its current and anticipated future levels of operations.

 

6

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ITEM 3.                             LEGAL PROCEEDINGS

 

TheCompany has litigation pending arising from the usual conduct of its business,none of which is expected to have any material effect on the Company’sfinancial position.

 

ITEM 4.                             SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

 

Nomatters have been submitted to a vote of security holders that are required tobe reported under the instructions to this item.

 

PART II

 

ITEM 5.                             MARKET FOR REGISTRANT’S COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

TheCompany’s common stock is traded on the New York Stock Exchange under thesymbol IAL.  The market and dividendinformation is included on page 11 of the Company’s 2005 Annual Report toShareholders and is incorporated herein by reference.

 

Thereare no restrictions of future cash dividends.

 

Therewere approximately 300 shareholders of record of the Company’s common stock at June 30,2005.

 

ITEM 6.                             SELECTED FINANCIAL DATA

 

Selectedfinancial data pertaining to the Company for the last five years is set forthon page 4 of the Company’s 2005 Annual Report to Shareholders and isincorporated herein by reference.

 

ITEM 7.                             MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This information is set forth on pages 2through 10 of the Company’s 2005 Annual Report to Shareholders and isincorporated herein by reference.

 

ITEM 7A.              QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK

 

Fluctuating foreign exchange rates mayimpact the Company’s earnings.  The Company’sforeign exchange exposure is related to activities associated with its Canadiansubsidiaries.  The Company does notattempt to manage these risks by entering into forward exchange contracts.

 

7

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ITEM 8.                             FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

SeePart IV, Item 15, which is incorporated herein by reference.

 

ITEM 9.                             CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTSON ACCOUNTING AND FINANCIAL DISCLOSURE

 

Therehave been no disagreements that are required to be reported under theinstructions to this item.

 

ITEM 9A.                   CONTROLS AND PROCEDURES

 

Inaccordance with Rules 13a-15 and 15d-15 under the Securities Exchange Actof 1934, the Company carried out an evaluation, under the supervision and withthe participation of management, including its chief executive officer andprincipal financial officer (the “Executives”), of the effectiveness of itsdisclosure controls and procedures as of the end of the period covered by thisreport.  Based on that evaluation, theExecutives concluded that the Company’s disclosure controls and procedures wereeffective as of June 30, 2005 to provide reasonable assurance thatinformation required to be disclosed in its reports filed or submitted underthe Exchange Act is recorded, processed, summarized and reported within thetime periods specified in the Securities and Exchange Commission’s rules andforms.

 

SeeMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING for management’sreport on our internal control over financial reporting appearing in theCompany’s 2005 Annual Report to Shareholders.

 

SeeREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM for our independentregistered public accounting firm’s report on our internal control overfinancial reporting appearing in the Company’s 2005 Annual Report toShareholders.

 

Inaddition, no changes in our internal control over financial reporting (asdefined in Rule 13a-15(f) under the Securities Exchange Act of 1934)occurred during the fourth quarter of the year ended June 30, 2005 thathas materially affected, or is reasonably likely to materially affect , ourinternal control over financial reporting.

 

ITEM9B.                OTHER INFORMATION

 

Inapplicable

 

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PART III

 

Theinformation required under Part III will be contained in the Company’s definitiveProxy Statement for the 2005 Annual Meeting of Shareholders, which informationis incorporated herein by reference.

 

PART IV

 

ITEM 15.                  EXHIBITS, FINANCIAL STATEMENT SCHEDULES ANDREPORTS ON FORM 8-K

 

Thefollowing items contained in the Company’s 2005 Annual Report to Shareholdersare incorporated herein by reference:

 
| (a)                                                                                                 | 1.  Financial Statements         |   |   |
|-----------------------------------------------------------------------------------------------------|----------------------------------|--------|--------|
| Consolidated Financial Statements (See Note):                                                       |                             |   |
| Balance sheets - June 30,  2005 and 2004                                                       |                             |   |
| Statements for the three years ended June 30,  2005                                            |                             |   |
| Income                                                                                              |                             |   |
| Shareholders’  equity                                                                          |                             |   |
| Cash flows                                                                                          |                             |   |
| Notes to  consolidated financial statements                                                         |                             |   |
| Report of  Independent Registered Public Accounting Firm                                            |                             |   |
|                                                                                                |                             |   |
|                                                                                                | 2. Financial Statement Schedules |   |   |
| Report  of Independent Registered Public Accounting Firm on Financial Statement  Schedule           |                             |   |
| Schedule for  the three years ended June 30, 2005 - II Valuation and qualifying  accounts |                             |   |

 

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3.                    Exhibits

 

3.1                   Articles of incorporation

 

3.2                   By-laws

 

13.1             Annual Report to Shareholders

 

14.1             Code of Business Conduct and Ethics

 

14.2             Code of Ethics for Senior Executives andSenior Financial Officers

 

21.1             Subsidiaries of the Registrant

 

23.1             Consent of PricewaterhouseCoopers LLP

 

31.1             Certification of the Chief Executive Officerpursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

31.2             Certification of the Chief Financial Officerpursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32.1             Certification of the Chief Executive Officerpursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002

 

32.2             Certification of the Chief Financial Officerpursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002

 

(b) Reports on Form 8-K filed during the quarter ended June 30, 2005:

 

May 10,2005 - Reporting the press release dated May 10, 2005 announcing thatWilliam G. (Greg) Gainer joined the Company as Vice President-Sales andMarketing.

 

May 12,2005 - Reporting the press release dated May 12, 2005 announcing financialresults for the third quarter ended March 31, 2005.

 

June 15,2005 - Reporting the post-retirement arrangement with David C. Treinen, formerCompany President, and compensation arrangements with the Company’s directorsand certain of its officers and reporting the press release dated June 20,2005 announcing that Ronald L. Rudy will assume the additional office of Chief ExecutiveOfficer effective July 1, 2005.

 

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SIGNATURES

 

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.

 
|                                                 | INTERNATIONAL  ALUMINUM CORPORATION |
|------------------------------------------------------|-------------------------------------|
|                                                 |                                |   |
| Date:    September 7,  2005 | By:                                 | MITCHELL K. FOGELMAN |
|                                                 |                                | Mitchell K. Fogelman |
|                                                 |                                | Senior Vice President-Finance; |
|                                                 |                                | Chief Financial Officer and |
|                                                 |                                | Secretary |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the Registrant and inthe capacities and on the dates indicated.

 
| **Signature**            | ** ** | **Title**                       | ** ** | **Date**               |
|--------------------------|------------|---------------------------------|------------|------------------------|
|                     |       |                            |       |                   |
| CORNELIUS  C. VANDERSTAR |       | Chairman  of the Board          |       | September 7, 2005 |
| Cornelius  C. Vanderstar |       |                            |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| RONALD  L. RUDY          |       | Director;  President and        |       | September 7, 2005 |
| Ronald  L. Rudy          |       | Chief Executive Officer         |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| MITCHELL  K. FOGELMAN    |       | Senior  Vice President-Finance; |       | September 7, 2005 |
| Mitchell  K. Fogelman    |       | Chief Financial Officer and     |       |                   |
|                     |       | Secretary                       |       |                   |
|                     |       |                            |       |                   |
| MICHAEL  J. NORRING      |       | Controller  and Chief           |       | September 7, 2005 |
| Michael  J. Norring      |       | Accounting Officer              |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| DAVID  M. ANTONINI       |       | Director                        |       | September 7, 2005 |
| David  M. Antonini       |       |                            |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| JOHN  P. CUNNINGHAM      |       | Director                        |       | September 7, 2005 |
| John  P. Cunningham      |       |                            |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| ALEXANDER  L. DEAN       |       | Director                        |       | September 7, 2005 |
| Alexander  L. Dean       |       |                            |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| JOEL  F. McINTYRE        |       | Director                        |       | September 7, 2005 |
| Joel  F. McIntyre        |       |                            |       |                   |
|                     |       |                            |       |                   |
|                     |       |                            |       |                   |
| DAVID  C. TREINEN        |       | Director                        |       | September 7, 2005 |
| David  C. Treinen        |       |                            |       |                   |

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM ON FINANCIAL STATEMENT SCHEDULE

 

Tothe Board of Directors ofInternational Aluminum Corporation

 

Ouraudits of the consolidated financial statements, of management’s assessment ofthe effectiveness of internal control over financial reporting and of theeffectiveness of internal control over financial reporting referred to in ourreport dated September 2, 2005 appearing in the 2005 Annual Report toShareholders of International Aluminum Corporation (which report, consolidatedfinancial statements and assessment are incorporated by reference in thisAnnual Report on Form 10-K) also included an audit of the financialstatement schedule listed in Item 15(a)(2) of this Form 10-K.  In our opinion, this financial statement schedule presentsfairly, in all material respects, the information set forth therein when readin conjunction with the related consolidated financial statements.

 

 

PricewaterhouseCoopersLLP

 

LosAngeles, California

September 2,2005

 

F-1

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INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES

 

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

 

For The Three Years Ended June 30, 2005

 
| **Description**                 | ** ** | **Balance  at  Beginning  of Year** |      | **Amounts  Charged  to Income** |   | **Amounts  Written  Off** |   | **Balance  at  End  of Year** | ** ** |
|---------------------------------|------------|-------------------------------------|-----------|---------------------------------|--------|---------------------------|--------|-------------------------------|------------|
|                            |       |                                |      |                            |   |                      |   |                          |       |
| Reserves  for doubtful accounts |       |                                |      |                            |   |                      |   |                          |       |
|                            |       |                                |      |                            |   |                      |   |                          |       |
| 2005                            |       | $                                   | 1,447,000 |                            | $      | 417,000                   |   | $                             | 620,000    |   | $ | 1,244,000 |   |
|                            |       |                                |      |                            |   |                      |   |                          |       |
| 2004                            |       | 1,384,000                           |      | 446,000                         |   | 383,000                   |   | 1,447,000                     |       |
|                            |       |                                |      |                            |   |                      |   |                          |       |
| 2003                            |       | 1,092,000                           |      | 810,000                         |   | 518,000                   |   | 1,384,000                     |       |
|                                 |            |                                     |           |                                 |        |                           |        |                               |            |  |  |  |  |

 

F-2

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